Alexza Pharmaceuticals Inc. said Monday the Food and Drug Administration denied their application for their new drug that would treat agitation in patients with schizophrenia or bipolar disorder.

The drug called Adusuve Staccato, which is taken by inhalation, was not allowed to be marketed after the FDA reported safety concerns over Phase I pulmonary safety studies after some patients who used the drug were not able to expel as much air.

Alexza intends to meet with the agency to address this issue. The company reiterated that "no serious or severe respiratory adverse events" were reported in these trials or in two Phase III trials of the drug.

Following the announcement, shares of the California based company plunged 52% down to $1.46.